Exowatt, a Sam Altman-backed startup, has announced plans to help the data center industry deal with its enormous energy usage using a new approach to solar power.

The news comes after the Miami-based start-up raised a $20 million seed round led by venture capital firms a16 and Atomic, as well as Open AI CEO Altman, in April. The Miami-based company uses what is called a “modular system” to generate, store, and dispatch clean energy.

The announcement comes as data center electricity usage is on a path to double by 2026, according to a recent International Energy Agency report—in part due to the increased demand for power-intensive workloads as a result of use cases such as generative AI and Bitcoin mining. 

By 2026, the global footprint of data centers could rise by the equivalent of the entire power consumption of a country like Germany, by somewhere between 650 and 1,050 terawatt hours, if the report’s estimates are correct. 

In contrast to traditional solar panels, which directly convert the sun into electricity, Exowatt’s flagship product—the P3—converts the sun's energy directly into heat stored inside a thermal battery. The battery that is made out of clay and ceramic composite, which can allegedly store heat “for months,” per an interview with Bloomberg.

Exowatt hasn’t specifically named any companies as clients at this stage, but has claimed it has a backlog of 1.2 gigawatts across data centers in the U.S. in the interview, attributing high demand to the AI boom. 

Hannan Parvizian, the company's co-founder and CEO, told the news outlet that the company's first energy project is set to go live at a location in West Texas later this year with an undisclosed crypto-mining partner.

The company said that its unsubsidized cost of energy is $0.04 cents per kilowatt hour, which is roughly comparable with conventional energy sources like coal. However, the new technology is unlikely to be a complete panacea to the energy woes faced by the U.S. data centre industry.

Parvizian told Bloomberg that only about 60% of the U.S. has the necessary level of sunlight to make the company's sun-based technology viable.